Monthly Payment
Loan Amount
Total Interest Paid
Total Amount Paid
Table of Contents
Monthly Payment, Total Interest & Total Cost
This calculator returns the four numbers that matter most when comparing home loans: the loan amount, the monthly principal-and-interest payment, the total interest paid over the life of the loan, and the total amount paid. Use it to compare lenders, terms, and down payment scenarios side by side.
How the home loan payment is calculated
The monthly payment on a fixed-rate home loan comes from the standard amortization formula:
M = P × [ r(1+r)n ] ÷ [ (1+r)n − 1 ]
- M — monthly principal-and-interest payment
- P — loan principal (home price minus down payment)
- r — monthly interest rate (annual rate ÷ 12)
- n — total number of monthly payments (term in years × 12)
Worked example using the calculator's defaults ($350,000 home, $70,000 down, 30-year term, 7.0% APR):
- P = $350,000 − $70,000 = $280,000
- r = 0.07 ÷ 12 = 0.005833
- n = 30 × 12 = 360 payments
- (1 + r)n ≈ 8.1165
- M = 280,000 × (0.005833 × 8.1165) ÷ (8.1165 − 1) ≈ $1,862.95 per month
Total paid over 30 years: $670,663. Total interest: $390,663 — significantly more than the principal itself. This is why the rate matters so much over a 30-year horizon.
Home loan types compared
The right loan product depends on your credit, down payment, military or rural status, and loan size:
| Type | Min credit | Min down | Mortgage insurance | Best for |
|---|---|---|---|---|
| Conventional | 620 | 3% | PMI under 20% down; cancellable | Buyers with decent credit |
| FHA | 580 (500 with 10% down) | 3.5% | MIP for life of loan (or refi out) | Lower credit, smaller down payment |
| VA | No federal min (lender 580–620) | 0% | None — one-time funding fee | Eligible veterans, active military, surviving spouses |
| USDA | 640 typical | 0% | Annual fee similar to PMI | Eligible rural and some suburban properties |
| Jumbo | 700+ | 10–20% | None typical | Loans above conforming limit ($806,500 in most counties for 2025) |
For most US buyers, conventional and FHA are the realistic options. VA is the best deal available if you qualify — no down payment, no PMI, and rates that often run below market.
Choosing your loan term
Loan term is the second-most consequential decision after the loan amount itself. Comparing a $280,000 loan at typical rate spreads:
| Term | Typical rate | Monthly P&I | Total interest |
|---|---|---|---|
| 30 years | 7.0% | $1,863 | $390,663 |
| 20 years | 6.75% | $2,128 | $230,840 |
| 15 years | 6.25% | $2,401 | $152,234 |
| 10 years | 6.0% | $3,108 | $92,994 |
Shorter terms have lower rates and dramatically lower total interest, but materially higher monthly payments. The 15-year cuts total interest by more than 60% versus a 30-year but raises the payment by about 30%. The 30-year mortgage with voluntary extra principal payments offers flexibility; the 15-year forces the discipline.
How to get a lower rate
Rate has the biggest single impact on long-term cost. Five concrete levers, ranked by typical effect:
- Credit score. Moving from 680 to 740+ can shave 0.5–0.75% off your rate. Pay down revolving balances and avoid new credit inquiries for 6–12 months before applying.
- Shop at least 3–5 lenders. The CFPB has documented that borrowers who get one quote pay roughly $300 more per year on average. Banks, credit unions, mortgage brokers, and online lenders all price differently.
- Down payment size. Crossing the 20% threshold removes PMI and often unlocks a slightly better rate tier.
- Discount points. Pay 1% of the loan amount upfront to lower the rate by ~0.25%. Worth it if you'll keep the loan past the break-even (typically 5–7 years).
- Loan term. 15-year loans typically price 0.5–0.75% below 30-year loans of the same lender.
Limitations of this calculator
- Returns principal and interest only. Real monthly outgoing usually also includes property taxes, homeowners insurance, PMI/MIP if applicable, and HOA fees.
- Closing costs (typically 2–5% of the loan amount) are a one-time charge at closing, not included in the monthly figure.
- Assumes a fixed rate held to maturity. Adjustable-rate mortgages (ARMs) re-calculate the payment when the rate resets.
- Does not include opportunity cost of the down payment or maintenance budget (rule of thumb: 1% of home value per year).
Sources & references
- Consumer Financial Protection Bureau — Owning a Home — loan-shopping guidance, disclosure standards, and qualified-mortgage rules.
- Freddie Mac Primary Mortgage Market Survey — weekly average US mortgage rates, the industry benchmark since 1971.
- US Department of Housing and Urban Development — Buying a Home — FHA and HUD program specifications.
- Department of Veterans Affairs — VA Home Loans — eligibility, funding fees, and entitlement rules.
FAQs
In everyday US usage, the two terms refer to the same product — a loan secured by real estate. Technically, the mortgage is the legal lien recorded against the property, while the home loan is the underlying promissory note. From the borrower's perspective, the practical difference is zero: the monthly payment, rate, term, and qualification standards are identical.
Conventional loans typically start at 620, FHA at 580 (or 500 with 10% down), VA loans have no federal minimum but most lenders impose 580–620, USDA loans typically 640. The cost gap is significant: a borrower at 760+ might get 6.5%, while a borrower at 640 on the same loan might get 7.5% or higher. On a $280,000 30-year loan, that 1% rate gap costs about $180/month and $65,000 over the life of the loan.
Conventional loans allow as little as 3% down for first-time buyers; FHA requires 3.5%; VA and USDA loans allow 0%. Below 20% on a conventional loan you pay PMI (typically 0.5–1.5% of the loan annually), which can be removed once you reach 20% equity. The 20% threshold is the cleanest benchmark — but it is not mandatory, and draining your emergency fund to hit it usually does more harm than the PMI savings.
One discount point costs 1% of the loan amount upfront and typically lowers the rate by 0.25%. Divide the point cost by the monthly payment savings to get the break-even in months. On a $280,000 loan, one point costs $2,800 and might save about $46/month — break-even around 61 months (about 5 years). If you plan to keep the loan longer than break-even, points pay off; if you might refinance or sell sooner, they do not.
This calculator returns principal and interest only. The figure that leaves your bank account each month is usually PITI — Principal, Interest, Taxes, and Insurance — held by the lender in an escrow account. Property taxes vary from 0.3% of home value annually in low-tax states to over 2.5% in high-tax states. Homeowners insurance typically runs $1,000–$4,000/year. PMI applies if you put less than 20% down. Plan for PITI to be 20–40% higher than the P&I figure shown here.